European Fintech Modifi to Launch Digital Trade Finance Platform in India

European Fintech MODIFI launched its digital Export Finance in India, with an objective to enable small and medium-sized (SMEs) exporters to thrive and offer attractive payment terms to their international buyers.

Having successfully launched its digital Trade Finance platform for SMEs in November 2018 in Europe, the company has chosen India as the first market for its expansion into Asia. India exports some USD 292bn of goods, with SMEs responsible for 40% of this trade. However, SMEs have considerable difficulty securing finance, with high rejection rates, tedious paperwork and substantial collateral requirements.

MODIFI sees itself as the perfect partner for Indian companies in these testing times. Their financing is “off balance sheet”, meaning it can be secured in addition to any outstanding loans and without increasing a company’s debt. Providing faster turnaround times and a seamless experience, MODIFI has enabled SMEs to apply online for collateral-free export finance in less than ten minutes and receive a response within 48 hours. Customers not only grow by getting liquidity otherwise trapped in invoices but, since MODIFI takes the credit risk of the buyer, can trade with confidence.

MODIFI is solving global Trade Finance for small and medium sized businesses (SMEs). Founded in 2018, MODIFI is tackling a $20 trillion industry in which 50% of requests for Trade Finance by SMEs are rejected by banks, resulting in a funding gap of $1.5 trillion annually. Through its paperless online platform, the company empowers businesses to grow, fostering strong international partnerships and benefitting local economies.

"We think we are perfectly positioned to help Indian SMEs in the current environment. Alternative lenders like MODIFI can step up to meet any increased demand” said CEO and Co-founder, Dr. Nelson Holzner. “We have created a product that benefits Indian exporters as much as possible. As India renews its commitment to digital finance in the recent budget with initiatives such as TReDS, we are confident the market is ready for MODIFI’s digital platform.”

TReDS is a government supported digital bill discounting programme for SMEs, expected to distribute ₹25,000 to ₹30,000 crore in Financial Year 2019-20. However, the scheme currently only caters to the domestic market and not exporters.

MODIFI’s expansion to India has been fuelled by €5.5m investment and a partnership with A.P. Moller-Maersk, the world’s largest container shipping company. Holzner expects the partnership will give MODIFI credibility amongst Indian exporters. The company expects to finance a volume of $1 billion in India by the year 2022. Its efforts in India are currently focused on spreading awareness of the platform among Indian SMEs and on-boarding them.

Together, the trio of founders (Nelson Holzner (CEO), Sven Brauer (COO) and Jan Wehrs (CTO)) have already successfully built and scaled the fintech venture BillPay. Dubbed the ‘Paypal of Germany’ by TechCrunch, the payments service provider was sold to Klarna in 2017 in one of Europe’s largest FinTech acquisitions.